I seem to recall LKH saying at some point on the Shell discussion board that the problem with holding Shell A shares is that the Dutch have a witholding tax and it was a pain to get it back if you were a UK owner. Once the Unilever HQ moves to Rotterdam and it is a Dutch company will the Dutch levy a witholding tax which the UK shareholders will have to fill in forms to get back or will there be some sort of A & B share with the Bs listed in London so it works in the same way Shell does?
always worth a read, but particularly the point he makes regarding the value of brands and the fact that quite often they can be undervalued in a screaming fashion.
Here is the extract if you can't be arxed to click on the link :-
""""We have now had two bids for portfolio companies in 2018, with Temenos agreed
offer for Fidessa adding to that for Dr Pepper last month. Just on Dr Pepper I cant
resist noting that the £15 billion offer for its equity comfortably exceeds the £12
billion that the Cadbury board accepted for the whole of Cadbury as recently as
2010. DPS had been spun out of Cadbury in 2008 as a sop to activist
shareholders on its register. In 2010 Cadburys chairman described Krafts offer
as good value, but it is hard to see now (or then) how this could be so, given not
only the strong gains in Kraft and its successor Mondelez shares once the deal
closed, but now the eventual revelation that just one division of old Cadbury has a
strategic value worth more than the much larger rest of the group. I dont write
this to stir up old grievances about the short-sightedness of British boards and
institutional shareholders; well, only a bit. Rather as a reminder to us all of how
exceptionally valuable some rare brands are and the folly of letting them go to
cash bidders at anything but exceptionally high valuations."""
"I think the CEO's nationality was the top of the list frankly... the biggest worry is the protectionism they seek by hiding within the EU -- not great for shareholders if the management screw things up and the barriers are thrown up to sell the company."
Yes, Games - any of us might take issue with at least some of these "factors", but I was merely trying to look at what would be "logical" from the board's point of view.
Ultimately, I don't think shareholders should care much... Then again, I am obviously not as "patriotic" as some. Comes from being an instinctive "citizen of the world", probably...
However, I hadn't fully appreciated it would see ULVR kicked out of the FTSE 100 - again, won't matter to many, but it may have some technical repercussions, at the margin?
I think the CEO's nationality was the top of the list frankly.
Perhaps a better decision would be to have the base in London not Rotterdam and a primary listing on the London Stock Exchange together with the vast majority of the two countries employees but then again -- there's no accounting for bias I suppose.
At the end of the day the biggest worry is the protectionism they seek by hiding within the EU -- not great for shareholders if the management screw things up and the barriers are thrown up to sell the company.
The bigger part of the share capital being in the NV
The greater liquidity in the NV structure, plus a (marginal) valuation advantage
The Euro being the principal reporting currency
The general costs of operating an HQ, as a non-revenue generating cost centre
The relative attraction of greater takeover protection (again, highly debatable as to whether we all view this as an "attraction", but at least some of he board will!)
The nationality of the CEO (shouldn't be a factor, of course, but foolish to think it didn't play a role)
All in all, I doubt the board really spent too much time on this one...
"I would have thought the more pragmatic decision would be to link up with a free and forward looking trading nation not hampered by as many rules and regulations."
What, Games - you're suggesting they move the HQ to Norway?! Or they could decamp to Switzerland and shack up with their close mates at Nestle...
Rats deserting the sinking ship, perchance.... ?
All in all, a storm in a (PG Tips) tea cup. The dual legal structure was convoluted and archaic and its demise was long overdue... shareholders should be happy it's history. Could've gone either way maybe, but most factors pointed towards Holland as the logical choice - although I agree with those who suspect that the supposed extra takeover protections were probably more prominent in mind than they ought to be.
I actually believe the party line - I doubt Brexit was much of a consideration at all. Games' "rules and regulations" might be a relevant consideration, but only where they actually do business - that being most corners of the world - rather than where a paltry handful of HQ-wonks choose to hang out. And it's probably cheaper for them to do so in Holland than in London, in almost every respect.
I gather that 55% of shares are held through the Amsterdam register, which influenced the decision, but the protection from takeover is probably what influenced the board the most, they just don't want to admit it.
As for being in or out of the EU I think that's irrelevant, they almost certainly assume that we will be back in within about 20 years (assuming we ever leave).
"It's been a miserable week for equity traders so far, and a three-day losing streak still risks becoming four on Thursday as bulls search for reasons to keep buying.Having passed several key support levels during the decline from its January ..."
If it splits it's business into 3 divisions and much of the food business is in the Netherlands, surely a sale of such business in the future (seems to be what most are doing - dumping lower margin food businesses) then the move to Rotterdam might look a little silly and they will then attempt to move it back to London?
strange decision really, to tie your business to within the dying embers of part of the EU block.
I would have thought the more pragmatic decision would be to link up with a free and forward looking trading nation not hampered by as many rules and regulations.
Of course as Bill has pointed out, the HQ is really more symbolic than economic in nature -- not sure about that. Polman will tie this company in knots if he's not careful.
Games -- maybe it's time to move on from Unilever !!
some think shoppers are more attacted to Aldi/Lidl and own brand products -
I visit three Tesco stores all within East London and see loads of shoppers grabbing
ULVR products. UK is a huge and varied consumer market and it seems to me that
branded products still doing well and under Dave Lewis tsco is revitalised and stores
Shopping habits have changed drastically in the last few years.
We are all time pressured and aware of it.
Convenience and home delivery has become important with internet shopping growing every year.
Avoiding adverts by the way you consume media wasn't a thing I hadn't thought of.
The internet is decimating whole industries and no one is safe. By shopping on line you also aren't walking past the strategically end of aisle offers in supermarkets showing well known brands at a knock down price.
Not all but many shoppers who's incomes are falling behind inflation due to austerity are deserting the big supermarkets in droves for the likes of aldi/lidl who offer quality products without all the added costs of advertising and branding. Once people try these products, they realise that the premium brands aren't that much better, if better at all. And money they save there is money they can spend on something else.
The times they are a changing.
PS I have held ULVR twice and RB once, was considering buying into both as the price declines but have had second thoughts.
Pol Pot Polman has seen his pay package surge by 51% to £10.3m in 2017 and is line for a bumper hike in salary and potential bonuses under an overhaul of executive pay.
Paul Polmans mammoth 2017 pay deal includes a 1.15m euro (£1m) annual salary, 2.3 million euro (£2m) annual bonus and 7.2m euros (£6.4m) in long-term bonus scheme shares, according to the groups annual report.
The news comes less than two months after Unilever announced it would move most of the production of Colmans out of Norfolk and marks a big rise on his 7.7m euro (£6.8m) pay package for 2016.
And Unilever revealed plans to hike his total fixed pay, including salary and benefits, by 5% to £1.45m in 2018 under a pay review that could also hand him up to 11.2m euros (£9.9m) in bonuses and shares a year.
This would mark a 23% rise in the current maximum potential for bonuses.
Unilever said its remuneration committee was of the view that this increased maximum opportunity is fully justified by higher risk and more stretching performance requirements.
But it risks stoking controversy over pay in the upcoming annual general meeting season.
Unilever said its new pay plans will see a raft of changes, including the requirement for bosses to invest up to 67% of their annual bonus in Unilever shares, which they need to hold for at least four years.
The remuneration committee added that to earn the maximum pay under the new five-year incentive plan, bosses will have to deliver truly outstanding performance over the full five years.
Details of its pay plans follow results for the Anglo-Dutch group earlier this month showing a 9% increase in annual profits to 8.15bn euros (£7.1bn).
games - " It's creative which accounts for it's growth, but as far as efficiency it has a long way to travel yet."
So they can cut costs further, which helps. That's good.
Sell more stuff - advertising, new markets - like, where , etc.
All kinda basic and they're doing that. Of course, the bigger they get, the harder to find dramatic growth. Just keep an eye on the debt Polmate, Lupo doesn't like too much of an "efficient balance sheet" or whatever they call it, and keep the divis rising.
Crikey, looking out of the window, I'm glad we didn't go to tango today, we'd never get back up the lane.
Bill, there is a lot more Unilever could do, when you consider it's output per employee is far far behind it's competitors. It's creative which accounts for it's growth, but as far as efficiency it has a long way to travel yet. Games
"... maybe he could have a pop at Unilever as well and shake up the apple cart even more than 3G have in unnerving Mr Polman..."
Not sure what more ULVR could do, Games? Their bolt is very much shot... what more can they suddenly "find"?
I can't really see Polman saying, er, hang on, we've found another chunk of margin under the sofa, and we think our (relatively low) dividend cover actually needs to be a notch lower again, and by the way - have another big share buy-back (at what could still be the wrong price)....
Peltz may be quite effective at what he does, but he is nothing on Buffett and the Brazilian boys, if they really want to get serious. Activism is generally a "one and done" opportunity, it is not a gift that keeps on giving...
"Ah would that we could get the perspective of someone with that experience on the matter!"... "Any news on that front?"
Alas, not... total radio silence for over four months now. Whether or not it's a case of no news is bad news, I think we must assume the radio will remain silent.
Who knows... much like his beloved Unilever, it could be that the great man - lamenting the horlicks which our political leaders have made of things, from a position of relative strength, and faced with the possible (Hobson's) choice of either a hard right, "hard" Brexit dissembling Tory junta or a hard left politburo under Agent Cob and Comrade McDonnell (and national bankruptcy) - has himself taken off to the land of the tulips, taking with him only his clogs and his (doubtless) gold-plated Royal Dutch Shell pension.....?
I can see him now, holding court in the brown café - coffee and dodgy "cigar" in either hand - regaling his new compatriots with (tall) tales of adventure and derring-do on the High Seas (and on the iii discussion boards)...
I thought a few might like to read this article at the end of this fund report -- It's quite interesting to read about the mess that P&G have got themselves into over the last 10 years and the implications now that they have slashed all the lower margin brands, ramped up the buybacks to extreme level and can't find any growth to fund the expected dividend increases in coming years :-
I recently bought some P&G shares and promptly dumped it again with a 2% gain and a feeling, after much more reading, that many of it's products whilst still solid in many ways are just under too much attack because of their still very high prices.
It will be interesting to see if Nelson Peltz makes a difference in attempting to abolish the failed matrix management structure at P&G, that he claims ensures no one seems to be accountable.
Games -- maybe he could have a pop at Unilever as well and shake up the apple cart even more than 3G have in unnerving Mr Polman.
"Its one of the FTSE Stalwarts and that's probably why its dropping as companies / funds look to reduce their exposure... Long term its a case of if 3G come back... they would get more protection in NL than UK so if I was Buffet I'd be buying up shares all over the place and making a last ditch attempt. "
I don't think there's any suggestion of dropping their London listing? Whichever way they go with their head office...
Ultimately, it's an HQ, a few amply stuffed sofas... and equally amply stuffed shirts. Not something to get emotional about - it's far more important (for the UK economy, etc) where they make their Marmite. And so on.
I think it rather optimistic to hope that Uncle Warren and his Brazilian mates will come riding to the rescue? Buffett was pretty firm when he ruled out another assault not so long ago, battered and bruised as he was by the first encounter. And he doesn't do hostile approaches - hard to see ULVR being at all receptive next time, even if post-Polman. Meanwhile, the current UK govt looks much less likely to be so welcoming as previous incumbents - and that certainly wouldn't change under Comrade Corbyn.
Still, never say never I suppose, and if the SP continues to slide....
It would be a massive blow to pride in the area where I live Port Sunlight and Thornton Hough and the North West where lever Brothers was born and many people who worked for them all their lives.
Maybe it will be just onother sad result of a stupid decision. I am sure we will get "its not about brexit " as we will with Job cuts from many other industries.
Will be a Real pity as with the selling of the Margarine Unie side of the business to KKR there should be less of a Historical link to NL but our Govt thinks that all we need are finance and banks which will all start moving next year. Some already transitioning.
Its one of the FTSE Stalwarts and that's probably why its dropping as companies / funds look to reduce their exposure. Combination of weak sales ( in all FMCG), higher Pound etc
Long term its a case of if 3G come back ( Kraft are desperate to buy someone / Buffet has 110 Billion burning a hole in his pocket ) they would get more protection in NL than UK so if I was Buffet I'd be buying up shares all over the place and making a last ditch attempt.
Doubt it would impact on the SP and probably makes economic sense but as has been stated, what a blow to the UK and particularly the Brexit delusional mob. Lord Leverhulme must be turning in his grave. A genuinely sad business should it happen.
I think that the Board is having to sharpen up after the bid and the dual structure costs have to be dealt with. I do not think that the HQ makes much difference since most of profits come outside of both UK and Holland. Most Dutch speak better English than most UK residents, so language no big deal. National pride is the issue and that is currently hurting the sp while the outcome is awaited. Still a top company for the patient investor
Nice cash level and appropriate imo, buy yourself a dinghy ! I will check out the post, thanks. I've taken a sort of barbell approach to this market - went to high cash position early jan. Kept high income stuff to keep the lights on and kept holding my higher risk focussed positions in smaller companies I've got to know well and actually want to hold. Nothing in between really appeals at the moment.
nimbo - the own brand thingy hits a nerve for me also and I think this has been happening for some time. I posted a crude fag packet analysis of 5 big brand companies over 10 years and posted it on the RB board - let me know what you think.
Games - Finding it increasingly hard to know where to invest - 34.2% cash at the mo!
On the verge of giving up and just spending the loot -- PS: don't tell the missus will ya?
We've known for years that smoking is fatal and now we know that breathing particulate- and N02-polluted air is also fatal. Add to that the toxicity of toast, jacket potatoes, roasted food, processed food, orange juice and alcohol, and we can conclude that eating and drinking are also, in general, quite lethal. And just in case you think cleaning your house might be a healthy idea we have learnt that most cleaning products will finish you off too. It's hardly worth getting out of bed because just about anything you do will wreck your chances of survival. On the other hand staying in bed would be catastrophic for your heart, lungs, muscles, brain and circulation although it could help you to avoid sexually transmitted diseases (unless there's someone in there with you). Truth is we're doomed to die whatever we do. But we've always known that, haven't we?
I sold here at £40 as mentioned and would definitely be interested in buying back. But I think the risks to unilever's business in the West is increasing for all the reasons touched on below. Now I have a kid so are more time constrained than ever we do all of our shopping online - split between amazon and Morrisons - who do by far the cheapest and best fruit and veg so everything else is ordered from there too. Our house used to be full of Unilever products - now its all own brand stuff from those 2 . The internet and convenience of delivery is completely undoing the so called brand loyalty companies like Unilever rely on. I also now never see any adverts for Unilever products - because I consume entertainment through netflix and amazon - which have no adverts. I can't be the only person who has gone or is going through this shift. Sure come summer I'll still eat ben and jerries but I hope unilever have realised the world is changing quickly around them and do something about it.
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